I keep hearing that empty office buildings are an economic time bomb. I keep hearing that housing inventory is low which is why house prices are high. Why can’t we convert offices to homes?

Question

I keep hearing that empty office buildings are an economic time bomb. I keep hearing that housing inventory is low which is why house prices are high. Why can’t we convert offices to homes?

In: 4298

Answer 1

They can be, and will be, but it takes time and money. The bomb has to in essence “go off” for the properties to be sold at a low enough price that converting makes sense.

Apparently a lot of the cheap money buildings of the past few years are due to hit their balloon payments in the next year or so. Most of them will supposedly be sold for pennies or turned over to the bank. Maybe we’ll see more movement in that direction once that hits.